Bloomberg News

Philippines Wants ‘Decisive’ Action on China Sea Oil Claims

November 15, 2011

(Adds del Rosario’s comments in third paragraph.)

Nov. 15 (Bloomberg) -- The Philippines, a U.S. ally, called for Southeast Asian leaders to play a “decisive role” in brokering a resolution with China over disputed areas of the South China Sea that contain oil and gas resources.

The 10-member Association of Southeast Asian Nations should facilitate talks to “define the undisputed and the disputed areas for the purpose of establishing a Joint Cooperation Area” in the waters, Foreign Affairs Secretary Albert del Rosario said today. The bloc is meeting in Bali this week for a regional summit that will include U.S. President Barack Obama and Chinese Premier Wen Jiabao.

“Asean is now at a critical junction of playing a positive and meaningful role to contribute in the peaceful resolution of the disputes,” del Rosario said in an e-mailed statement. The bloc “must play a decisive role at this time if it desires to realize its aspirations for global leadership.”

The Philippines and Vietnam reject China’s map of the sea as a basis for joint development and aim to leverage regional concerns over its growing military might to secure underwater energy resources. The Philippines proposed in May dividing up land features according to the United Nations Law of the Sea, a move that would undermine China’s claims to most of the waters.

Under the Philippines proposal, China would lose rights to a large swath of the South China Sea now encompassed by its tongue-shaped nine-dash map that extends hundreds of miles south from Hainan Island to the equatorial waters off the coast of Borneo. The nine-dash line is “the core of the problem,” del Rosario said.

Hydrocarbon Deposits

At stake in agreeing on boundaries is largely untapped hydrocarbon deposits that Chinese studies suggest contain more than 14 times estimates of its oil reserves and 10 times those for gas, according to the U.S. Energy Information Agency. China, the world’s biggest energy consumer, claims two of 15 exploration blocks the Philippines put out for tender in June.

“The intervention of outside forces” won’t help settle territorial disputes in the South China Sea, Chinese Foreign Ministry official Liu Zhenmin told reporters today in Beijing. Such interference only sabotages peace and development in the region, he said.

Asean and China agreed in July on non-binding guidelines for operating in the seas designed as the first step toward a binding code of conduct. U.S. Secretary of State Hillary Clinton has urged the claims to be settled according to international law based on land features, mirroring the Philippines’ proposal.

The U.S.’s alliance with the Philippines has led to tensions with China, which has used patrol boats to disrupt hydrocarbon survey activities in disputed waters. Chinese vessels in May sliced cables of a survey ship doing work for Vietnam, the second such incident in a month. In March, Chinese ships chased away a ship working for U.K.-based Forum Energy Plc off the Philippines.

--Editors: Patrick Harrington, John Brinsley

To contact the reporter on this story: Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net


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